Apartment, Office Forecasts Hinge on Job Growth

By Murray, Michael | Mortgage Banking, October 2010 | Go to article overview

Apartment, Office Forecasts Hinge on Job Growth


Murray, Michael, Mortgage Banking


As apartment vacancy rates drop, office vacancies will increase and put downward pressure on rents going into next year, according to Marcus & Millichap Research Services, Encino, California. The forecast said apartment vacancies will slip to 7.4 percent by the end of the year with asking and effective rents further increasing to annual gains of 2 percent and 3 percent, respectively. It added that the number of 18-to-34-year-olds living at home increased by 2.2 million between 2005 and 2009--"the highest level recorded in more than 25 years."

Based on a forecast of job-growth acceleration, a large portion of the 18-to-34-year-old demographic will establish independent households, leading "to the addition of 4 million individuals to the prime renter cohort from 2010 to 2015," Marcus & Millichap's forecast said. "Most young adults will head for apartment rentals, based on strict mortgage standards and elevated down-payment requirements for several years to come."

However, the report also said a double-dip recession or larger-than-expected economic deceleration could temporarily derail an apartment sector recovery.

"We do eventually need job growth," said Richard Anderson, senior real estate investment trust (REIT) analyst at BMO Capital Markets, New York, interviewed on CNBC. "We are calling for job growth to start to materialize sometime in the middle part of 2011. We think we can carry ourselves to that point--continue the growth trajectory to that point--but jobs are a necessary component to this business."

The unemployment rate increased to 9.6 percent in August, the Bureau of Labor Statistics reported, following layoffs of temporary census workers and increased hiring of part-time workers.

"It doesn't look too good right now--the economic data is not good--but we think it is a reasonable call to see jobs materialize sometime in the middle part of 2011," Anderson said.

"There is a significant divergence among [apartment] market performance," added Hessam Nadij, managing director at Marcus & Millichap, also interviewed on CNBC. "If you look at absorption numbers ... so far this year, they have been dominated by markets that have created jobs. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Apartment, Office Forecasts Hinge on Job Growth
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.